The US banking sector suffered in the fourth quarter as regional banks fell

New York, January 12 (EFE) – Profits of some large banks in the US were hit in the last quarter of 2023 by a government charge linked to the decline of regional banks earlier in the year. such as Signature Bank or Silicon Valley Bank.

Still, banks benefited from high interest rates, with JPMorgan Chase, the nation’s largest bank, reporting record annual profits of nearly $50 billion.

More than $4 billion of that came from First Republic, which JPMorgan bought at a bargain price during the banking crisis earlier this year.

Its chief executive, Jamie Dimon, one of the most heard voices on Wall Street, said in an earnings report that the U.S. economy remains strong and consumers continue to spend.

However, the chief executive also warned that there is an ongoing need to increase spending due to the green economy. If this is combined with changes in global supply chains, increased military spending and rising health care costs, inflation could reach higher rates than the market expects, he predicts.

Layoffs at Citigroup

Citigroup bank will lay off 10% of its staff after suffering a loss of $1.839 million in the final quarter of 2023 due to increased costs, borrowing costs and falling revenue.

In the same quarter the previous year, the firm posted a profit of $2.5 billion.

According to one of the documents published by the company this Friday as part of its business results for the fourth quarter and 2023, the workforce cuts will affect about 20,000 employees in the medium term.

The US entity said in a statement that despite losses in the fourth quarter, profits for the full year were 9.2 billion euros, up from 14.5 billion euros in 2022; Revenue for the 2023 financial year was 78.5 billion euros, up from 75.3 billion euros in 2022.

Bank of America profit decline

Bank of America, for its part, received a net profit of $26,515 million in 2023, which is 3.68% lower than the $27,528 million earned a year earlier, due, among other things, to contributions to the guarantee fund. last quarter of the year.

Wells Fargo generated net income of $19.142 million in 2023, up 40% from the previous year. In the fourth quarter of the year, the bank recorded a net profit of $3.446 million, which is 9% higher than the result of the same period last year.

Investors had mixed reactions to the numbers, which are generally interpreted as a thermometer of the economy, and around mid-session JPMorgan rose (0.45%) while Citigroup (-0.83%) and Bank of America (-0.83%) fell. 0.81%) and Wells Fargo (-2.59%).

The big banking results will continue on Tuesday (Monday is a holiday in the US), with figures from Goldman Sachs and Morgan Stanley more influenced by the investment market than the average consumer, and they likely reflect Wall Street’s strong performance over the past year.